Going for Growth 2016: Brazil

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‌After several years of modest growth, Brazil is facing a recession which has laid bare a number of structural bottlenecks that need be addressed to restore strong and sustainable growth. The most important include severe shortages in public infrastructure, low educational attainment, a complex and fragmented tax system, low integration into international trade due to significant trade barriers, and an under-developed financial system.

1. PISA is the Programme for International Student Assessment.

Source: OECD (2014), PISA 2012 Results: What Students Know and Can Do (Volume I, Revised edition, February 2014): Student Performance in Mathematics, Reading and Science, PISA.

Previous Going for Growth recommendations include:

Increasing public and private investment in infrastructure by improving the capacity of subnational governments to execute projects without unnecessary delays and by modernising the port sector, including through regular concession tenders.

Reducing barriers to trade by reducing tariff protection and phasing out local content requirements in publicly financed projects.

Enhancing outcomes and equity in education by focusing on improving the quality of education through better teacher pay, in-service training and stronger performance incentives.

Reducing distortions in the tax system by addressing the fragmentation and complexity of the tax system, and unifying state-level indirect tax rates and tax bases.

Improving the efficiency of financial markets by gradually reducing financial support to the national development bank and focusing its lending activities on the financing of infrastructure, small and medium enterprises and innovation.

Brazil launched the second stage of the Logistics Investment Programme PLI, with planned investments of BRL 70 billion through concessions by 2018.

The report also discusses the possible impact of structural reforms on other policy objectives (fiscal consolidation, narrowing current account imbalances and reducing income inequality). In the case of Brazil, enhancing outcomes and equity in education would contribute to reduce income inequality.